IN THE COURT OF APPEALS

STATE OF ARIZONA

DIVISION TWO

JOON NAE KIM, a married man, and

CHANG NAE KIM, a married man,

Plaintiffs/Appellants,

v.

HAIDER MANSOORI, a single man,

Defendant/Appellee. )

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) 2 CA-CV 2006-0069

DEPARTMENT B

O P I N I O N

APPEAL FROM THE SUPERIOR COURT OF PINAL COUNTY

Cause Nos. CV200401185 and CV200401234 (Consolidated)

Honorable Stephen F. McCarville, Judge

APPEAL DISMISSED

Hoopes & Adams, PLC

By John R. Hoopes

Mack & Associates, P.C.

By Richard V. Mack, Scott M. Drucker,

and Corey I. Richter Chandler

Attorneys for Plaintiffs/Appellants

Phoenix

Attorneys for Defendant/Appellee

E C K E R S T R O M, Presiding Judge. MAR 23 2007 

### FILED BY CLERK

COURT OF APPEALS

DIVISION TWO1 About a month after the Kims entere d into a contract with Ghobrial, Steven and

Rania Sayegh entered into a contract with Ghobrial to purchase the same property. When

Ghobrial failed to convey the land to the Sayeghs according to their agreement, they also

filed a complaint for breach of contract and sought specific performance. Not long after, the

trial court ordered the cases consolidated.

2 ¶1 Appellants Joon Nae Kim and Chang Nae Kim appeal from the trial court’s

grant of summary judgment on their claim for attorney fees under A.R.S. § 12-341.01 against

appellee Haider Mansoori. On appeal, the Kims argue Mansoori’s motion for summary

judgment was premature and the trial court abused its discretion when it certified the

judgment as final under Rule 54(b), Ariz. R. Civ. P., 16 A.R.S., Pt . 2. We agree, and

because the trial court erred when it certified the judgment as final, we dismiss the appeal

for lack of jurisdiction.

¶2 The Kims entered into a contract to purchase a pproximately forty acres of

vacant land in Pinal County for $160,000 from Fahmy David Ghobrial. The Kims were

represented by their own real estate agent, and Mansoor i represented Ghobrial. After

Ghobrial failed to convey the property as req uired by the contract, the Kims filed a

complaint against him, cl aiming breach of contract and seeking specific performance,

damages, and attorney fees. Mansoori maintained that Ghobrial had signed the agreement,

but Ghobrial denied doing so and asserted that the signatures on the contract were not his. 1

The Kims amended their complaint to include Mansoori as a defendant, asserting claims of

fraud and consumer fraud against him and requesting attorney fees under § 12-341.01.3

¶3 Mansoori filed a motion for partial summary judgment against the Kims on the

claim for attorney fees, asserting the Kims could not be awarded attorney fees under § 12-

341.01 because the action did not “aris[e] out of a contract.” The Kims responded that the

motion was “premature and procedurally inappropriate” because Rule 54 (g)(2), Ariz. R. Civ.

P., requires that attorney fees be decided after a decision on the merits of a case.

¶4 After a hearing, the court granted Mansoori’s motion, finding the Kims would

not be entitled to attorney fees under § 12-341.01 because “there is no[] contract between

Mansoori and Kim.” Soon thereafter, Mansoori filed a form of judgment, proposing that the

judgment be entered pursuant to Rule 54(b). The Kims filed an objection to the proposed

form of judgment, asserting that certificatio n under Rule 54(b) would be inappropriate

because the request for attorney fees was not a separate claim. Nonetheless, the court

directed the entry of judgment pursuant to Rule 54(b), purportedly making the judgment

final and appealable. The Kims now challenge the propriety of the trial court’s Rule 54(b)

certification of the claim as a final judgment.

¶5 Although neither party asserts that this court lacks jurisdiction to consider the

appeal before us, we may examine our jurisdiction sua sponte. See Salerno v. Atlantic Mut.

Ins. Co.

, 198 Ariz. 54, ¶ 9, 6 P.3d 758, 761 (App. 2000). In fact, “[t]his court has the duty

to review its jurisdicti on and, if jurisdiction is lacking, to dismiss the appeal.” D avis v.

Cessna Aircraft Corp.

, 168 Ariz. 301, 304, 812 P.2d 1119, 1122 (App. 1991); see also4

Musa v. Adrian , 130 Ariz. 311, 312, 636 P.2d 89, 90 (1981) (“Even though the parties do

not raise the issue, the appellate court must determine that it has jurisdiction.”).

¶6 Generally, appellate court jurisdiction is “limited to final judgments which

dispose of all claims and all parties.” M usa

, 130 Ariz. at 312, 636 P.2d at 90; see also

A.R.S. § 12-2101(B). Rule 54(b) provides an exception when the trial court “direct[s] the

entry of final judgment as to one or more but fewer than all of the claims or parties

. . . upon

an express determination that there is no just reason for delay and upon an express direction

for the entry of judgment.” We review a Rule 54(b) certification for an abuse of discretion,

Southern California Edison Co. v. Peabody Western Coal Co

. , 194 Ariz. 47, ¶ 19, 977

P.2d 769, 775 (1999), unless the issue is whether “the judgment in fact is not final, i.e., did

not dispose of at least one separate claim of a multi-claim action,” in which case, we review

the trial court’s determination de novo. Davis , 168 Ariz. at 304, 812 P.2d at 1122; s ee also

Llo yd v. State Farm Mut. Auto. Ins. Co. , 189 Ariz. 369, 373, 943 P.2d 729, 733 (App.

1996).

¶7 The Kims argue the trial court erred when it certified as a final judgment the

summary judgment against them on their claim for attorney fees. Specifically, they contend

such a claim in this particular context is not a separate one under Rule 54(b) and is therefore

not eligible for certification as a final judgment. Because this is a case of first impression,

we must interpret the civil procedure rules by employing principles of statutory construction.

See Byers-Watts v. Parker

, 199 Ariz. 466, ¶ 10, 18 P.3d 1265, 1268 (App. 2001). “Our5

const ruction must necessarily be governed by the overarching principle that when

interpreting a court rule or statute, we are seeking to ascertain the intent of the framer.”

State v. Baca

, 187 Ariz. 61, 63, 926 P.2d 528, 530 (App. 1996). If the plain text of the rule

is unambiguous, then it “will be given its usual, ordinary meaning unless doing so creates an

absurd result.” State v. Aguilar , 209 Ariz. 40, ¶ 23, 97 P.3d 865, 872 (2004). But, if the

language is ambiguous, then “we may look at a variety of elements, including the rule’s

context, the language used, the subject matter, the historical background, the effects and

consequences, and its spirit and purpose.” S tate ex rel. Romley v. Superior Court , 168

Ariz. 167, 169, 812 P.2d 985, 987 (1991).

¶8 Mansoori contends Rule 54(b) clearly contemplates that, for purposes of the

rule, a claim for attorney fees may be considered a separate claim. Rule 54(b) states:

When more than one claim f or relief is presented in an

action, whether as a claim, counterclaim, cross-claim, or thirdparty claim, or when multiple parties are involved, the court may

direct the entry of final judgment as to one or more but fewer

than all of t he claims or parties only upon an express

determination that there is no just reason for delay and upon an

express direction for the entry of judgment. In the absence of

such determination and di rection, any order or other form of

decision, however designated, which adjudicates fewer than all

the claims or the rights and liabilities of fewer than all the parties

shall not terminate the action as to any of the claims or parties,

and the order or other form of decision is subject to revision at

any time before the entry of judgment adjudicating all the claims

and the rights and liabilities of all the parties. For purposes of

this subsection, a claim for attorneys’ fees may be considered a

separate claim from the related judgment regarding the merits of

a cause.6

Mansoori argues that, with the addition of the last sentence in 1999, the rule “specifically

provides that attorneys’ fees are a separate claim and, therefore, may be determined without

resolving any or all of the other claims in the case.”

¶9 But that sentence, read in its entirety and in the context of the committee note

and other provisions of Rule 54, provides a trial court discretion to treat a claim for attorney

fees as a separate claim, subject to Rule 54(b) certification, only in the context of a “related

judgment regarding the merits of a cause.” I d. Here, the trial court granted judgment on the

Kims’ claim for attorney fees without entering a related judgment on the merits of the cause.

The State Bar Commi ttee Notes to the 1999 amendments explain the rationale for the

pertinent provision as follows:

[T]here may be good reasons to ente rtain an immediate

judgment on the merits of a cause, while leaving attorneys’ fees

issues to be addressed later. Rule 54(b) was amended in 1999

to permit that approach. Under the amended rule, the trial

judge may certify the “merits” judgment for immediate entry and

appeal before such judge renders a decision on the attorneys’

fees issues. The trial court will retain jurisdiction to address the

attorneys’ fee iss u e after the appeal of a Rule 54(b) certified

judgment on the merits.

Ariz. R. Civ. P. 54(b) bar committee note. Thus, the framers intended to permit a trial court

to characterize a claim for attorney fees as a separate claim so it would have the discretion

to enter an immediate, appealable judgment on the merits —notwithstanding lingering and

unresolved attorney fees issues. N at’l Broker Assocs., Inc. v. Marlyn Nutraceuticals, Inc.

,2 Our understanding of the purpose of this language is reinforced b y the State Bar

Committee Notes for Rule 58(g), Ariz. R. Civ. P., 16 A.R.S., Pt. 2. Rule 58(g) requires that

judgment not be entered until clai ms for attorney fees have been addressed “[e]xcept as

provided in Rule 54(b).” In explaining the purpose of that exception, the notes observe: “In

the rare case in which a judgment on the merits of a cause would be appropriate prior to

resolution of attorneys’ fees, the trial court may certify the ent r y of a ‘merits’ judgment

under Rule 54(b).” Notably absent is any reference to certifying the entry of an attorney fee

judgment as a separate claim before entry of a merits judgment.

7 211 Ariz. 210, ¶ 33, 119 P.3d 477, 484 (App. 2005). 2 The note provides no express support

for entering an appealable judgment on an attorney fee claim in the absence of judgment on

the merits. And, to the extent the Arizona Appellate Handbook may state otherwise, it is

not pre cedential authority. S ee 1 State Bar of Arizona, Arizona Appellate Handbook §

3.3.1.6.1 (4th ed. 2000).

¶10 We agree with th e Kims that Rule 54(g)(2) more squarely addresses, and

resolves, the scenario here. That subsection states:

When attorneys’ fees are claimed, the determination as

to the claimed attorneys’ fees shall be made after a decision

on the merits of the cause

. The motion for attorneys’ fees shall

be filed within 20 days from the clerk’s mailing of a decision on

the merits of the cause, unless extended by the trial court.

(Emphasis added.) In short, the rule governing the procedure for claiming and being

awarded attorney fees expressly precludes a determination on an attorney fee request prior

to a decision on the merits. Therefore, Rule 54(b) cannot be read, by silence or by

implication, to authorize certification of a type of final judgment—a judgment on an attorney

fee claim preceding a decision on the merits—that is expressly forbidden in Rule 54(g).8

¶11 Mansoori counters that, when all subsections of Rule 54(g) are read together,

the sequencing limitation to determining an attorney fee request does not apply to this

situation because “Rule 54(g) is intended to govern a court’s determination as to the amount

of attorneys’ fees[,] . . . not a determination as to entitlement thereto.” But no language in

any of the four subsections of Rule 54(g) suggests that the “determination as to the claimed

attorney’s fees” refers exclusively to the amount of fees as disti nguished from the

determination of a party’s entitlement to them. To the contrary, subsection (1) uses the

phrase “cl aim for attorneys’ fees” when setting forth a procedural requirement at the

pleading stage—a stage at which the amount of fees would not even be a rel e vant issue

because the amounts would not yet be known.

¶12 We acknowledge that, under the exceptional circumstances of this case, the

trial court arguably possessed enough information to assess whether the Kims’ claims for

attorney fees could survive summary judgment. But, a party’s entitlement to attorney fees

cann ot, in most cases, be determined until the court has first reached a decision “on the

merits of the cause.” For example, § 12-341.01, the provision under which the Kims seek

attorney fees, authorizes an award of such fees to a “successful party” in litigation arising out

of a contract or “upon clear and convincing evidence that the claim or defense constitutes

harassment, is groundless and is not made in good faith.” § 12-341.01(A) and (C). Both

potential bases of award generally presuppose a prior decision on the merits. Thus, in the

absence of any language in Rule 54(g)(2) limiting its scope to determinations of the amount9

of attorney fees, and given the obvious logic of awaiting a decision on the merits under most

circumstances to determine a threshold entitlement to fees, we find little ambiguity in the

rule’s requirement that all determinations on attorney fees await a decision on the merits.

¶13 For the foregoing reasons, we find the purpose of the 1999 amendment to Rule

54(b) was to allow a determination of attorney fees to be made after a judgment on the

merits and did not contemplate or address a determination of attorney fees before a judgment

on the merits. We therefore conclude Rule 54(b) cannot be read to authorize the

certification of a judgment expressly prohibited by Rul e 54(g)(2). Accordingly, the trial

court erred when it certified as final a judgment on an attorney fee claim pursuant to Rule

54(b) in advance of a “related judgment regarding the merits of [the] cause.”

¶14 Because this court lacks jurisdiction over this appeal, it is dismissed.

_____________ _______________________ PETER J. ECKERSTROM, Presiding Judge

CONCURRING:

____________________________________ J. WILLIAM BRAMMER, JR., Judge

____________________________________ PHILIP G. ESPINOSA, Judge